The common view is that there is no zakah on diamonds and other precious stones, unless they are acquired for trade. Some writers claim ijma‘ on this position. Thus in Fiqh al-Sunnah we read:

Scholars have come to agree that there is no zakah for mas (diamond), durr (pearls), yaqut (sapphire or ruby), lu`lu` (pearl), marjan (coral), zabarjad (chrysolite), and other precious stones except when acquired for trade.[1]

When Muslims read such a statement, no matter how unreasonable, most of them dare not examine the matter any further. For, we have been told repeatedly that ijma‘ is a source of binding Islamic law and therefore to question it would be tantamount to rejecting a divine injunction. But the truth is that such a high authority for ijma‘ cannot be established on the basis of the Qur`an and the authentic ahadith and even among scholars there is no agreement as to what ijma‘ is and what type of ijma‘ is binding. Moreover, it is extremely difficult to establish whether ijma‘ has actually taken place. Claims of ijma‘ are often thrown around by people in order to support their opinions, but closer examination shows most such claims to be doubtful at best. Take for example the statement in Fiqh al-Sunnah that scholars agree on there being no zakah on diamonds. This claim is clearly inaccurate, as is clear from the following observation made by Mufti Muhammad Taqi Usmani:

The overwhelming majority of the Muslim jurists are of the view that precious stones are not subject to the levy of zakah unless they are acquired for the purpose of resale. There are, however, some jurists like Imam Ahmad who believe that all precious stones are liable to zakah, even if they are kept for personal use. (http://ulamaa.org/diamondszakat.htm)

Clearly, if one of the founders of the four Sunni schools of fiqh disagrees with a view, then the claim that “scholars agree” on that view is at best inaccurate.

But regardless of how many scholars have agreed on a view, that view is as good as its basis in the Qur`an, authentic ahadith, and reason. So we need to examine what guidance these sources provide us concerning zakah on diamonds.

THE QUR`AN

In the Holy Qur`an God Most High says:

And those who hoard up gold and silver and do not spend them in the way of God, announce unto them a painful punishment. One day that (treasure) will be heated up in the fire of hell and their foreheads, their sides, and their backs will be branded with it: “This is the treasure that you hoarded up for yourselves. Now taste what you used to hoard up”. (9:34)

Many scholars quote this verse as part of the evidence that there is zakah on gold and silver. But it seems clear that here gold and silver are mentioned merely as age-old symbols and forms of wealth. If at any time wealth could be possessed in other forms, the obligation to spend out of it in the way of God would still apply. Today wealth can be possessed in the form of paper money and diamonds, so believers are duty bound to spend out of this wealth in the way of God. It would be a very superficial interpretation of the verse to say that if we have gold or silver worth $2000 we should spend out of it in the way of God but if we have a million dollars in paper money or an equivalent amount in diamonds, then we have no obligation to spend out of it anything in the way of God.

To interpret the verse (9:34) by restricting it entirely to gold and silver would be like insisting that we should always use horses to build our armed forces, since God says:

And make ready for them whatever you can of (military) force, including steeds of war, to deter the enemy of God and your enemy, and others whom you may not know but God knows. (8:60)

Here God has mentioned horses because in the time of the Holy Prophet they greatly enhanced the fighting power of an army. Today, of course, horses would not deter any of the numerous enemies of Islam and Muslims, armed to the teeth with weapons of mass destruction. Most scholars would agree that today the commandment in 8:60 requires us to acquire weapons like tanks, war planes, missiles, and nuclear weapons[2]. Similarly, 9:34 should be interpreted to mean that we should spend in the way of God out of whatever wealth we possess, be it gold or silver or some other form of wealth. This interpretation is further supported by other verses like the following:

And in their wealth (amwal) there is an acknowledged right (haqq ma‘lum) for the sa`il (one who asks for assistance) and mahrum (one who is deprived) (70:24-25; see also 51:19)

Today wealth clearly includes diamonds, for, wealth may be defined as what we possess of money or of items that are bought and sold often enough to acquire a market value. Today diamonds and many other precious stones are clearly items that have a determinable market value.

Thus the letter and the spirit of the Qur`an suggests that in our age diamonds are subject to zakah.

SUNNAH/HADITH

Turning now to the Sunnah/Hadith, we note that there is no authentic hadith stating that precious stones are not subject to zakah. Fiqh al-Sunnah does not mention any such hadith. Mufti Muhammad Taqi Usmani, however, quotes the hadith:

(“There is no zakah on a stone”).

But he mentions no source for it and does not say whether the hadith is sahih or not. The fact is that this hadith is absent from almost all the books of ahadith, including such sahih collections as Bukhari and Muslim. In view of this, the probability is very high that it has been falsely attributed to the Holy Prophet.

It is probably true that in the time of the Prophet zakah was not collected on precious stones and this is why many fuqaha` arrived at the conclusion that there is no zakah on them. But before reaching that conclusion we need to understand why zakah was not collected on precious stones in the early days of Islam.

As noted above, wealth of a person is defined by what he possesses of money or items having a market value. Such items are subject to change. What has a market value at one time and place may not have such a value at another time and place. For example, at one time – and even now in some places -- antique items, though valued, were not bought and sold to an extent that they could be assigned a market value. Now such items are marketed, and their market value can be assessed by dealers.

In the relatively poor and simple economy of Madinah in the Prophet’s time not many people possessed precious stones[3] and there is no evidence that they were marketed, although they might have been occasionally sold by individuals who happen to possess them for a price that they almost arbitrarily determined. When an item is not bought and sold often enough, it is not only difficult to determine its price but also it may not be easily exchanged for what one needs. This is why zakah was not levied on precious stones in the time of the Prophet. Now, however, such stones, especially diamonds are almost as good as gold. You can exchange them for money almost as easily as you can exchange a piece of gold. Consequently, it is most unreasonable to rule that there is zakah on gold but not on diamonds.

Scholars do give some arguments to justify their view that precious stones including diamonds are not subject to zakah. Thus Mufti Usmani gives the following two arguments:

First:

“Principle governing the levy of Zakat is that only those assets are Zakatable which either fall within the definition of money, or are the metals universally accepted as a medium of exchange like silver and gold. All other assets are not Zakatable unless they are meant for trade and resale.” Since diamonds neither fall under the definition of money nor are a metal accepted as a medium of exchange, so, according to Usmani, they are not “Zakatable” unless they are meant for trade and resale.

But the very principle to which an appeal is made here by Usmani is problematic. For on the basis of this principle we can all avoid paying most of the zakah by transferring our money into assets that do not fall under “money” or “medium of exchange”. Good reasonable laws do not have such huge and obvious loopholes and we can only expect God and the Messenger to give us good reasonable laws. For this reason, the principle stated by Usmani should be changed as follows: “assets subject to zakah are those that either fall within the definition of money or are items having a market value”. This means that any item that can be acquired for “trade and resale” is subject to zakah even if it is not actually acquired for that purpose, for such an item necessarily has a market value.

Second:

The “value of precious stones depends on their scarcity and rareness. They have no intrinsic value. Therefore they are like valuable antiques or manuscripts which, on account of their rareness, sometimes have more value than gold. Still, they are not subject to Zakat unless they are purchased for trade or resale.”

Here the statement that precious stones have no value of their own because their value depends on their scarcity and rareness is not meaningful. The value of all items to a great extent depends on how scarce or how common they are. Moreover, by this logic paper money also should not be subject to zakah, since it has no value of its own. The only reason paper money is subject to zakah is that it can be exchanged for other useful or valuable items. And this essential property is found today in some precious stones including diamonds, and even in rare manuscripts, antiques, and works of art.

CONCLUSION

Every item that has an assignable market value is subject to zakah. Diamonds and many other precious stones are now marketed by dealers who can determine their market value and exchange them for cash. Hence they are subject to zakah.

[2] It is possible to decide, on the basis of other considerations, that in the present age political action is the better course than building deterrent military force.

[3] It is doubtful that anyone among the Muslims or the Arabs possessed diamonds. Although recorded knowledge of diamonds goes back to 1000 BCE, it was not widely known even in the more advanced civilizations. According to the Gemological Institute of America, up until 1896, India was the only source for diamonds to the world. This suggests a low knowledge of, and interest in, diamonds outside of India until relatively recently, since otherwise people would have searched for them more widely and much earlier. The Qur`an and the Hadith do not even mention diamonds much less show them in possession of people. Other precious stones are mentioned and there is even evidence that some Muslims possessed them. Thus the Qur`an says that “you bring forth from the [sea] ornaments to wear” (16:14, 35:12). This suggests that people in Arabia were familiar with and possessed some stones extracted from the sea. Many ahadith mention pearls, although generally in comparisons. Thus in Bukhari 1/345, the Holy Prophet, during his mi‘raj sees in Paradise tents made of pearls (lu`lu); in 4/466, 6/402, 488, 489, 8/583 a tent in jannah is described as a huge hollow pearl; in 5/462, 3/829, 6/274 the drops of the Holy Prophet’s perspiration are compared to pearls. In Abu Da`ud 38/4348 a man describes two of his sons as pearls.

The evidence that some Muslims in Madinah possessed some precious or semi-precious stones is found in the story of the false accusation against ‘Aishah, the mother of the believers, in which it is said that she had a necklace made of zifar, beds of onyx, a semiprecious stone (Bukhari 5/462 etc). In Muslim (2978-2981) and other books we find the story of a Companion, Fadalah bin ‘Ubayd, who bought a necklace containing gold and pearls (kharaz) received as a booty from the Jews in the battle of Khaybar, but one version of the story describes the necklace as of gold only (Muslim 2980).